RI secures $500m loan to boost growth

The Asian Development Bank (ADB), one of the Indonesia's major donors, will provide Indonesia with a US$500 million loan to help accelerate growth that has been impacted by the global economic downturn.
The agency's board of directors on Wednesday approved the loan, which is categorized as a Countercyclical Support Facility (CSF) - a scheme the ADB set up in June 2009 to support its developing member countries in need of fiscal spending amid the global economic downturn.
"Indonesia's economy has been resilient during the global crisis, but with exports, private invest-ment and consumption still sluggish, strong countercyclical fiscal stimulus is needed to protect the social sectors and support poverty reduction," Arjun Thapan, the director general of ADB's Southeast Asia department, said in a media statement.
The Central Statistics Agency (BPS) has reported that exports in August reached $10.5 billion, surpassing $10 billion for the first time since October last year.
On a year-on-year basis, however, exports in August had declined 15.41 percent.
In its 2009 state budget, the Indonesian government set aside Rp 73.3 trillion ($7.6 billion) in fiscal stimulus in the forms of tax relief, capital spending and expansion of social assistance programs.
With the government also significantly upgrading upward maintenance and material spending in its initial 2009 budget, this year's fiscal stimulus totals Rp 113 trillion.
The statement predicts that without the stimulus package, Indonesia's economic growth could weaken to between 2 percent and 3 percent from the current 4.3 percent.
Retaining a relatively high growth is crucial for the country's efforts to retain, if not reduce, poverty rates, the agency said.
Having fallen one percentage point per year since 2003 to 14.2 percent of the population in early 2009, poverty remains a serious problem in Indonesia, with more than 35 million people still living below the national poverty line, the ADB says.
Another 42 percent of the population is vulnerable to falling into poverty if their circumstances deteriorate suddenly, it says.